What Even Are Tokenomics?
As hopefully all of you who read our publication know, Tokenomics go far beyond pie charts and emission schedules, which we see only as the final, finishing touches, built up on a much larger body of work. This is a knowledge gap in the market that we at Tokenomics DAO are here to fill.
How to Think About Tokenomics
Whilst economics are predictive (meaning that, given a rule, we try to estimate an outcome) tokenomics are design oriented (meaning that, given a desired outcome we try and create rules that will encourage said outcome). The reason this is important is that in order to create a sustainable token economic model we need to align incentives between all participants (users), we need to have an understanding of how these users will behave and what they will react/respond to. Thus we touch upon many disciplines such as game theory, behavioral economics & mechanism design to name a few.
We’ve come up with a set of aspects that we feel properly represent how to judge the strength of a token. Thus we bundled these different aspects together and called them Token Strength Parameters (the marketing department always has to have a catchy name you know…)
So on with it I say!
Tokens Strength Parameters
Simply put, the token strength parameters are:
Token utility
Demand drivers
Value creation
Value capture
Bussines Model
If you’ve been in the tokenomics space for a while none of these will sound new to you. However, there is a lack of standardisation when it comes to what each of these terms means. This is understandable because they are all closely related but tackle slightly different topics and people often get them mixed up. So let's go through them one by one.
You can see the Token Strength parameters for multiple projects on Tokenomics Hub.